Former UK pensions minister Guy Opperman has criticised the proposed Value for Money (VFM) framework, describing it as “utterly unworkable” in its current form.
Opperman, now a strategic advisor at Aptia, served as parliamentary pensions minister between 2017 and 2022, making him the UK’s longest-serving pensions minister.
The Pension Schemes Bill, which introduces the VFM framework, is in the final stages of the legislative process, with the House of Lords and House of Commons resolving remaining details ahead of Royal Assent.
The framework will introduce a four-colour rating system – red, amber, light green and dark green – designed to assess pension schemes on performance, costs and service quality. The first assessments are expected by 2028.
Under the proposals, poorly performing schemes will be required to improve or consolidate into larger arrangements.
Speaking at an Aptia event in London on 21 April, Opperman said the current government had made a “complete basket case” of the framework, which was originally consulted on by the Conservative government in 2021, and should “scrap it, throw it away, and start again”.
He described the framework as “utterly unworkable”, adding that it amounted to “government by committee”, adding: “The madness of having two regulators who don’t talk to each other has made it a really awful example.”
Under the proposed framework, pension funds would be overseen by both the Financial Conduct Authority and The Pensions Regulator.
However, Opperman indicated that his criticism was limited to the VFM framework, noting that most of the bill continues policies developed by successive governments, including decumulation, superfunds and collective defined contribution (CDC) schemes.
He claimed that 95% of the bill was unopposed.
